The euro climbed back above $1.08 on Wednesday. The common currency peaked at $1.0866 from $1.0786 the night before. Despite the stabilization, the common currency has been under pressure against the dollar since the end of March. A key reason is the prospect of further interest rate hikes in the US to combat high inflation while the European Central Bank (ECB) remains on hold. According to currency expert Antje Praefcke from Commerzbank, the euro may not have bottomed out yet: “On the one hand, the danger of an energy crisis, which would weigh heavily on the economy in the euro zone, has not yet been averted. On the other hand, the first estimate will be made next week published on April inflation. At best, inflation should have gradually peaked and is slowly falling again.” The market could penalize the ECB’s hesitation in fighting inflation and put downward pressure on the euro accordingly.
However, economists think even higher inflation rates are possible after producer prices in Germany rose by 30.9 percent in March. This is the strongest increase “since the survey began in 1949,” according to the Federal Statistical Office.
Prices on the oil market fluctuated significantly. First, the Brent variety from the North Sea rose in price by around one percent, and in the early evening the price was down 2.3 percent at $104.90 per barrel. The day before, the price had slipped by five percent after the international Monetary Fund lowered its forecast for global economic growth. However, according to experts, further price increases must be expected due to the failure of Libyan supplies and a possible European embargo for Russian oil.